Correlation Between Mobileye Global and Stag Industrial

Can any of the company-specific risk be diversified away by investing in both Mobileye Global and Stag Industrial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mobileye Global and Stag Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mobileye Global Class and Stag Industrial, you can compare the effects of market volatilities on Mobileye Global and Stag Industrial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mobileye Global with a short position of Stag Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobileye Global and Stag Industrial.

Diversification Opportunities for Mobileye Global and Stag Industrial

-0.44

Correlation Coefficient

Mobileye Global  Stag Industrial

Very good diversification

The 3 months correlation between Mobileye and Stag is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mobileye Global Class and Stag Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stag Industrial and Mobileye Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mobileye Global Class are associated (or correlated) with Stag Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stag Industrial has no effect on the direction of Mobileye Global i.e., Mobileye Global and Stag Industrial go up and down completely randomly.

Pair Corralation between Mobileye Global and Stag Industrial

Given the investment horizon of 90 days Mobileye Global Class is expected to under-perform the Stag Industrial. In addition to that, Mobileye Global is 4.5 times more volatile than Stag Industrial. It trades about -0.07 of its total potential returns per unit of risk. Stag Industrial is currently generating about 0.02 per unit of volatility. If you would invest  3,210  in Stag Industrial on December 22, 2024 and sell it today you would earn a total of  31.00  from holding Stag Industrial or generate 0.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mobileye Global Class  vs.  Stag Industrial

Mobileye Global Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mobileye Global Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Stag Industrial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stag Industrial are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Stag Industrial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mobileye Global and Stag Industrial

The main advantage of trading using opposite Mobileye Global and Stag Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobileye Global position performs unexpectedly, Stag Industrial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Stag Industrial will offset losses from the drop in Stag Industrial's long position.

The idea behind Mobileye Global Class and Stag Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.